How much does car insurance really cost? Cost factors and savings potential for 2025 revealed
16.06.25
9
Minutes
Katrin Straub
Managing Director at nextsure
The cost of car insurance often seems like a mystery. Many motorists pay hundreds of euros each year without knowing the exact factors that influence their premium. Discover now how your premium is made up and which levers you can use to save significantly.
The topic in brief and concise terms
The cost of motor insurance depends on over ten factors, including regional class, vehicle type class and no-claims bonus class, which are reassessed annually.
Prices for car insurance rose by an average of 20 per cent in 2024, due to higher repair and spare parts costs.
By choosing the right tariff and adjusting the excess, annual mileage and driver group, you can save several hundred euros a year.
Precisely decipher the cost factors of your car insurance
The price of your car insurance is no random occurrence. Insurers calculate premiums on the basis of more than ten individual risk factors. The regional class reflects the claims history of your registration district; there are over 400 different districts here. The type class assesses your specific car model among almost 32,000 variants in terms of its susceptibility to claims. Your personal no-claims bonus class (SF class) rewards claim-free driving with discounts of up to 80 per cent. These three pillars form the foundation of your premium amount. But other factors also play an important role in answering the question: How much does car insurance cost? These include your annual mileage, the age of the drivers and the number of named users. Even where you park your vehicle overnight can affect the premium by a few percentage points. Someone who parks in a garage often pays five per cent less than someone who parks on the street. These factors largely determine how deeply you have to dig into your pocket for your insurance cover.
Understanding price increases and putting average costs into context for 2024/2025
The cost of motor insurance has risen noticeably in recent years. Between 2023 and 2024 alone, premiums increased by an average of around 20 per cent. One major reason for this is the higher cost of spare parts and garage repairs. The average claim under motor third-party liability insurance rose from 2,500 euros in 2014 to 4,000 euros in 2024. That is an increase of sixty per cent in just ten years. For 2025, experts expect further adjustments, as insurers anticipate persistently high costs for claims and administration. The motor insurance industry forecasts an increase in premium income of up to eleven per cent for 2025. Despite this development, there are significant differences in what car insurance costs. Basic motor third-party liability insurance is the cheapest option and is chosen by over 58 per cent of vehicle owners. The differences between partial and fully comprehensive cover are clearly noticeable in the price. Fully comprehensive cover offers the most extensive protection, but it is also the most expensive. Knowing these trends helps you assess quotes correctly.
Regional class and type class: your place of residence and vehicle model in focus
Two often underestimated but crucial factors for the cost of your car insurance are the regional class and vehicle type class. The regional class is re-determined annually by the German Insurance Association (GDV) for each of the more than 400 registration districts in Germany. It reflects the local claims record: many accidents or thefts in a region lead to a higher classification and therefore more expensive premiums. There are twelve regional classes for third-party liability, 16 for comprehensive cover, and nine for fully comprehensive cover. A lower regional class often means lower premiums. The vehicle type class of your car has a similar effect. Almost 32,000 different vehicle models are assessed here each year based on their accident and repair statistics. Models that are statistically less often involved in accidents or cause lower repair costs are assigned a lower type class. Sports cars and large SUVs often have higher type classes than small cars. A look at the current type class statistics before buying a car can save you hundreds of euros a year. These two classification systems explain a large part of the differences in premiums.
No-claims class (SF class): Maximise rewards for claim-free driving
Your no-claims discount class (SF class) is a powerful lever for reducing the cost of your car insurance. The system rewards drivers for each year without a reported claim through a higher discount. SF classes usually range from SF 0 for new drivers to SF 35 or even SF 50 for drivers who have been accident-free for many years. With a high SF class, you can significantly reduce your premium rate in third-party liability and comprehensive insurance – partial cover is not affected by this. A new driver often starts with a premium rate of over 100 per cent of the base amount in SF 0. After just one accident-free year, an upgrade already takes place, for example to SF 1 with a rate of perhaps 70 per cent. After 35 accident-free years, the premium rate can fall to below 20 per cent. Every accident-free year counts and noticeably reduces your premium. If a claim occurs, a downgrade takes place, the extent of which is set out in your insurer’s SF class tables. It is important to understand the premium rate of your car insurance precisely. The SF class is therefore a direct reflection of your driving history and has a major influence on what your car insurance costs.
Practical check: This is how much car insurance costs for different types of drivers
The question “How much does car insurance cost?” cannot be answered in general terms, as the individual factors vary greatly. A new driver (18 years old, SF 0) with a small car often has to expect annual premiums of around €1,000 or more. For an experienced driver (45 years old, SF 25, garage, 15,000 km/year) with a mid-size car, however, the cost of comprehensive cover can be as low as €300 to €500. A retiree (70 years old, SF 35, small car, 5,000 km/year) may even pay less, often under €300. These examples illustrate the huge range. Annual mileage is a significant cost factor. Anyone who drives only 5,000 kilometres pays up to 25 per cent less than someone with 20,000 kilometres. The group of drivers also plays a role: if the vehicle is used only by the policyholder and their partner, this is usually cheaper than if young drivers under 25 are also insured. Around three quarters of policyholders choose a restricted group of drivers. A precise calculation is therefore essential.
Here are some typical cost examples (annual premiums, comprehensive cover with a €300 excess, third-party, fire and theft with a €150 excess):
New driver (19 yrs, VW Polo, SF 0, 10,000 km): approx. €900 - €1,500
Family (father 40 yrs, mother 38 yrs, VW Golf, SF 15, 15,000 km, child 18 yrs listed as a driver): approx. €600 - €950
Commuter (50 yrs, BMW 3 Series, SF 30, 20,000 km, garage): approx. €450 - €700
Retiree (68 yrs, Opel Corsa, SF 35, 6,000 km, garage): approx. €280 - €450
These figures are estimates and may vary depending on region, exact model and insurer. However, they show the trend of how strongly individual characteristics have an impact.
Reduce costs: Effective strategies for cheaper car insurance
There are numerous ways to actively influence how much your car insurance costs. Paying annually can reduce your premium by up to five per cent compared with monthly payment. [-,-] Agreeing a deductible (e.g. EUR 150 for partial comprehensive cover, EUR 300 or 500 for comprehensive cover) also significantly lowers the premium – often by 15 to 30 per cent. [-,-] Consider whether tying yourself to a garage network is an option for you; here you can save up to 22 per cent if you have repairs carried out at the insurer's partner workshops. [-] Restrict the group of drivers to the minimum necessary. If novice drivers no longer drive the vehicle, report this immediately. [-] Check your annual mileage and adjust it if necessary – fewer kilometres often mean savings of ten to 15 per cent. [1,-] A second car can often be classified more favourably if the first car already has a high SF class. Use these levers to optimise your costs.
Other specific ways to save include:
Compare tariffs: Check the current offers at least once a year.
Adjust cover: For older vehicles over ten years old, partial comprehensive cover or third-party only is often sufficient. When is fully comprehensive cover no longer worthwhile?
Use discounts: Some insurers offer discounts for certain occupational groups (e.g. civil servants, farmers) or for owner-occupied property.
Review telematics tariffs: With careful driving, savings of up to 30 per cent are possible here.
Seasonal number plates: For vehicles not used all year round (e.g. convertibles, motorcycles).
Pay small claims yourself: To avoid being downgraded in the SF class, it can be worth paying minor damage claims of up to around EUR 500 yourself.
By combining these measures, a significant reduction in insurance costs can often be achieved.
Motor insurance in Germany is based on solid legal foundations. The Compulsory Insurance Act (PflVG) stipulates that every registered motor vehicle must have third-party liability insurance. This requirement serves to protect road traffic victims by ensuring that injured parties are compensated even if the person responsible for the accident is unable to cover the damage themselves. The Insurance Contract Act (VVG) regulates the general rights and obligations in the relationship between the policyholder and the insurer. The Motor Vehicle Liability Insurance Regulation (KfzPflVV) specifies details, for example regarding minimum coverage sums. Our expert tip: Make sure you have a sufficiently high sum insured, ideally EUR 100 million as a lump sum for personal injury, property damage and financial loss. Current court rulings may also be relevant, for example on the question of gross negligence or in disputes over claims settlement. For example, the insurer may reduce its benefits if obligations after an insured event have been breached, but it must assert this by giving notice of termination within one month of becoming aware of the breach. A good understanding of these basics helps you better assess your rights and obligations and thus better understand the cost of your car insurance. For new drivers, it is particularly important to check the terms carefully.
Special case for novice drivers: avoid cost traps and make use of savings potential
New drivers often face particularly high costs for their first car insurance policy. Insurers classify young drivers between 18 and 24 years of age in the expensive no-claims class 0 (SF 0) due to statistically higher accident risks. Annual premiums of €1,000 and more are not uncommon here. But there are effective strategies to reduce these costs. A popular method is the second-car arrangement through the parents: the new driver’s vehicle is insured as the parents’ second car and therefore often benefits from a better SF class (e.g. SF ½). Taking part in "accompanied driving from 17" can also lead to discounts of up to 30 percent. Another option is to transfer an existing no-claims class from grandparents or other close relatives, provided they deregister their own vehicle. The choice of vehicle also plays a major role: models with a low type class are cheaper for new drivers to insure. Our expert tip: check telematics tariffs, where safe driving can be rewarded with discounts of up to 30 percent. These tariffs can be an attractive way for young drivers in particular to reduce car insurance costs. Find out more so you do not pay unnecessarily high premiums.
Your way to the ideal and affordable car insurance
The cost of car insurance is a complex interplay of many factors, from your vehicle type to your personal claims history. With an understanding of these influencing factors and the savings strategies presented, you can actively shape your premium. An annual comparison of tariffs and adjusting your cover to your current personal circumstances are essential. Take advantage of individual advice to make the most of every opportunity for optimisation. Remember that the cheapest insurance is not always the best; pay attention to the scope of cover and the quality of service as well. With careful analysis and the right decisions, you will find the right cover at a fair price. We at nextsure will be happy to help you optimise your car & mobility insurance. Request your personalised risk analysis now: Have your insurance situation reviewed free of charge and receive specific optimisation suggestions.
More useful links
Statistisches Bundesamt (Destatis) offers official press releases and statistical data that may be relevant for analysing cost factors.
Gesamtverband der Deutschen Versicherungswirtschaft (GDV) provides comprehensive statistics on the development of motor third-party liability insurance.
Through the GDV, you can look up the current type classes for your vehicle model, which have a significant impact on the cost of your car insurance.
Verbraucherzentrale offers practical tips and information on how you can save several hundred euros on your car insurance.
Kraftfahrt-Bundesamt (KBA) publishes official vehicle statistics that provide insights into the vehicle stock in Germany.
Deutsche Bundesbank provides information on the current inflation rate in Germany, an important factor in overall cost development.
Bundesfinanzministerium offers information on taxes, including insurance tax and fire protection tax, which are relevant to insurance.
FAQ
What influences the cost of my car insurance the most?
The most important factors are your no-claims bonus class (SF class), your vehicle's model class and the regional class of your place of residence. However, individual factors such as annual mileage, drivers' ages and the chosen excess also have a major influence.
How can I save on car insurance as a young driver?
Young drivers can save money by insuring the car as a second vehicle through their parents, taking part in accompanied driving, having an existing no-claims bonus class transferred, choosing a car with a low insurance group or using a telematics tariff.
Is fully comprehensive insurance always worth it?
Comprehensive insurance is particularly worthwhile for new cars and young used cars (up to around five years old). For older vehicles, partial cover or even just the legally required third-party liability insurance may often be sufficient and save costs. The value of the vehicle and individual security needs are decisive.
What is the difference between type class and regional class?
The vehicle model class assesses the risk of damage for a specific vehicle model (e.g. VW Golf vs Porsche 911). The regional class assesses the risk of damage at the vehicle owner's place of residence, based on the accident and theft statistics of the registration district.
How often should I review and compare my car insurance?
It is advisable to review your car insurance at least once a year and compare quotes. Especially before the deadline of 30 November or if your circumstances change (moving house, a new car, a different group of drivers), switching can be worthwhile.
What legal basis is there for motor vehicle insurance in Germany?
The most important legal basis is the Compulsory Insurance Act (PflVG), which requires motor vehicle liability insurance for all registered vehicles. Other relevant laws are the Insurance Contract Act (VVG) and the Motor Vehicle Compulsory Insurance Ordinance (KfzPflVV).
